Monday, August 29, 2016

Would fate permit it, the election of Hillary Clinton will be the supreme and perhaps terminal act in an Anything-Goes-And-Nothing-Matters society. Yet, even with the fabulous luck of running against a consummate political oaf, she struggles to get the upper hand, and she may land in the White House with the lowest voter turnout in modern history. And then her reward in office may be to dodge indictment for four years while the nation crumbles around her. This is the way the world ends: not with a bang or a whimper but with a cackle.

Imagine the scene following Hillary’s election. In order to salvage the last shred of its credibility, the Federal Reserve raises its overnight funds rate another quarter percent and crashes the last Potemkin semblance of a “recovering” economy, that is, the levitated stock markets. Tens of millions of retired individuals previously driven into them by zero interest rate policy are wiped out. Even more gravely, pension funds and insurance companies are destroyed, but not before their troubles trigger derivative contracts with big banks which then explode and expose the inability of counterparties to make good on their ends of the bet.

In a blind panic, the Federal Reserve reverses its policy in December, drops the Fed Funds interest rate back to 25 basis points and announces the grandest new round of “quantitative easing” (money printing) ever, while congress is coerced into voting for the greatest bailout of institutions the world has ever seen, along with a “one time” helicopter drop of a cool trillion dollars in the form of combined tax cuts and “shovel-ready infrastructure projects.” The media rejoices. The US Dollar tanks. Absolutely nobody wants US treasury bonds, bills, and notes. The pathetic remnant of the American middle class stares into the abyss. (If it looks hard enough, it sees the US government down there.)

We’re now living in the setup for this, treating the election shenanigans so far as just another sordid television entertainment. It’s more than that. It’s an engraved invitation to the worst crisis since the Civil War. The crisis may even feature events like a civil war with identity groups skirmishing around our already-ruined “flyover” cities just like the factions in Aleppo and Fallujah. Thank the “Progressive” Left for that. Believe me, history will blame them for chucking the idea of a unifying common culture onto the garbage barge.

And yes, for all our tribulations here in America, the rest of the world will be struggling with its own epic disorders. It remains to be seen whether they will lead to war as, say, the Chinese ruling party attempts to evade the crash of its own rickety banking system, and the inflamed millions of ruined “investors,” by starting a brawl with Japan over a few meaningless islands in the Pacific. Could happen. And, oh, is North Korea for real with its right out front nuclear bomb-and-missile program? What does the rest of the world plan to do about that?

You don’t even want to look at the Middle East. The grisly conflicts there of recent decades are just a prelude to what happens when the House of Saud loses its grip on the government. That will happen, and then the big question is whether Aramco can continue to function, or whether the critical parts of it end up damaged beyond repair as competing tribes fight over it. In any case, the world will begin to notice the salient fact of life in that part of the world: namely, that the Arabian desert, and much of the great band of arid territory on either side of it, cannot support the populations that mushroomed in the nutrient bath of the 20th century oil economy. And they won’t all be able to self-export to Europe either.

Speaking of that interesting region, around the same time Hillary sets up for intensive care in the third floor of the White House, the old order will be swept away across Europe. Farewell Merkel and Monsieur Hollandaise. Farewell to the squishy Left all over the place. Enter the hard-asses. You’d think if anything might unite that continent it might be the wish to defend secular freedom under the rule of law, but even that remains to be seen.

Yes, the world following 3Q 2016 is looking like one hot mess. If you remember anything, let it be this: the primary mission of your cohort of the human race is managing contraction. The world is getting wider and poorer again and the outcome everywhere will be determined by the success of people to manage their lives locally. The big things of this world — governments, corporations, institutions — are losing their traction and whatever we manage to rebuild will get done locally. In victory, Hillary may utterly cease to matter.

Sunday, August 28, 2016

Almost two-thirds of the year have passed. And I know there's much work to be done. Paring things down is always a priority. I'm planning to weed out books, CDs, etc. What I'd like is a yard and house with flow. One doesn't have to get into the finer points of feng shui. An uncluttered place just looks nicer.

Monday, August 22, 2016

What the world is witnessing, without actually paying much attention, is the death of our debt-based economy — that is, borrowing the means to thrive in the now from a future that can’t really furnish it anymore. The illusion that the future would always provide was a legacy of the cheap energy era. That era ended in 2005. The basic promise is broken and with it the premise for living as we had been. The energy available today, especially oil, is no longer cheap enough to run the industrial economies designed to run on it. Any way that you look at the dynamic, Modernity loses.

With oil under $50 a barrel, and gasoline under $3 a gallon (back east), the public apparently thinks that the Peak Oil story is dead and gone. But when it costs $75 a barrel to pull the stuff out of the ground, and the stuff only sells for $47 a barrel, the oil companies’ business model doesn’t really work. The shale oil companies especially have been gaming the system by issuing bonds that pay relatively high interest rates in an investment climate where almost nothing else offers enough yield to live on, especially for pension funds and insurance companies. Two little upward bumps this year in the price of oil toward the $50 range prompted a wish that the good old days of high-priced oil were coming back, that the oil business would be profitable again.

The trouble is that high oil prices — say, over $100 a barrel, as it was in 2014 — crush advanced economies, so that demand for oil crashes, and with it productive activity. Without productivity, the debts issued by companies (and even governments) don’t get repaid. There really is no “sweet spot” in this energy cost equation.

A lot of wishful thinkers would like to believe that you can run contemporary life on something beside oil. But the usual “solutions,” solar and wind energy, don’t pencil out, especially when you consider that the hardware for running them — the photovoltaics, charge controllers, batteries, turbines, and blades, can’t be mass-produced and distributed without the very fossil fuels they are supposed to replace.

These matters add up to the essential quandary of our time. It has expressed itself in falling standards of living for what used to be the middle class, most particularly in the USA. European countries have tried to work around this problem with their rigid bureaucracies for keeping those already employed from losing their jobs. In France, Spain, and Italy, this has only made it much harder for people under 30 to get a job. The jobs picture for millennials in the USA is not much better, though there’s no structural job-protection for their elders who are still working here. They live in abject fear of termination by the HR ghouls of the big corporations.

Sooner or later the younger generation will explode in rage at the system and there is no telling what the result will be. We’re already seeing it in the black ghettos, where decades of accrued social dysfunction make the anomie and purposelessness — of young men especially — much worse. The newer loser class of people who once had good jobs and now have poor prospects of ever getting them back gets swept up in the mania for their incoherent champion, Trump, who shows no sign of understanding the essential quandary of our time. The tragedy of Trumpism is that the man so poorly represents a large group of Americans with genuine woes and grievances. And the larger tragedy of our country these days is that events did not prompt better leaders to step forward.

The explanation may be that people who actually understand the dark dynamics spinning out are rather pessimistic about the our ability to carry on under the familiar disposition of things. Hillary represents the forces in our national life that want to pretend that nothing is wrong, that all the splendid rackets of the day — Federal Reserve interventions, corporate debt-fueled stock buybacks, military log-rolling, medical racketeering, the college loan Ponzi, pension fund levitation, primary dealer bank interest rate arbitrage, agribiz Frankenfood proliferation — can just grind along like some old riverboat banger engine keeping the garbage barge of American life afloat. Thus, Hillary is shaping up to be the patsy of the century, likely to preside, if elected, over the biggest blowup of established arrangements that world has ever seen.

The debt problem alone is absolutely certain to express itself in at least three major ways: the crash of equity markets, the collapse of the bond markets, and the loss of faith in the value and meaning of whatever money you’re using. Any of those events would turn the economic life of the linked advanced economies upside down. Any of them could occur during the 2016 US election season.

"[A]fter decades in which it struggled with overcrowding, Japan is confronting the opposite problem: When a society shrinks, what should be done with the buildings it no longer needs? ... 'Tokyo could end up being surrounded by Detroits,' said Tomohiko Makino, a real estate expert who has studied the vacant-house phenomenon. Once limited mostly to remote rural communities, it is now spreading through regional cities and the suburbs of major metropolises. Even in the bustling capital, the ratio of unoccupied houses is rising."

Friday, August 19, 2016

Another busy week for me draws to a close. The September issues of Harper's and The Atlantic came in the mail today, and both are substantial reads. The Atlantic mentions, in an article called "Trump's Intellectuals", a short-lived website called The Journal of American Greatness. Online for only four months--it closed in June--JAG "made a highbrow case for overthrowing America's existing political order and replacing it with the raw, dynamic, intoxicating energy of Donald Trump."

JAG Recovered lists the titles of articles published on JAG, if not always the articles themselves, which were deleted.

I learned of the murder yesterday while reading Nancy Nall. This is how she put it:

I SO wish Coozledad was still with us, so we could hear his colorful opinion about this feeb, charged with the homicide of his neighbor, upon whom he (the shooter) had regularly bestowed racial slurs and! Hit the neighbor’s mother with his car. Oh, and yeah, he was drunk. But you’re gonna love his mugshot, because that is the face of the master race.

Monday, August 15, 2016

There’s a new feature to the Anything-Goes-and-Nothing-Matters economy: Nothing-Adds-Up. The magicians who pretend to measure the growth of GDP (Gross Domestic Product — the monetary value of all the finished goods and services) came up with a second quarter “adjusted” figure of 1.2 percent. That would have to be construed by anyone acquainted with basic econ stats as perfectly dismal. And yet the Bureau of Labor Statistics put out a sparkly Nonfarm Payroll Report of 255,000 for July, way above the forecast 180,000.

There were so many ways to game the jobs number — between people forced to work more than one shit job and the notorious “birth/death model” used to just make up any old number for political purposes — that no one can take this information seriously. Anyway, the GDP number was instantly forgotten and the jobs number launched the stock markets to previously uncharted record altitude.

It’s that time of the year for the hedge fund boys, with their testosterone flowing, to start burning down their house rentals in the Hamptons. And it’s also the time of year for an ever more stressed financial system to go down in flames. And, of course, it’s a presidential election season. Even for one allergic to conspiracy theories, it’s not farfetched to imagine a coordinated effort by central banks — under government direction — to generate Money-Out-Of-Thin-Air (QE) for the purpose of allowing “liquidity” flows to end up in US equity and bond markets in order to paint a false picture of “recovery” so as to insure the election of Hillary Clinton. I think that is exactly behind the recent money-printing activities by the Japanese and European Central Banks, and the Bank of England.

Why would it end up in US markets? For bonds, because the Euro and Japanese bond sovereign yields are in sub-zero territory and the BOE just cut its prime rate lower than the US Federal Reserve’s prime rate; and for stocks, because the value of the other three currencies is sliding down and the dollar has been rising — so, dump your falling currency for the rising dollar and jam it into rising US stocks. It’ll work until it doesn’t.

Why do this for Hillary? Because she represents the continuity of all the current rackets being used to prop up belief in the foundering business model of western civilization. If she doesn’t get into the White House there may be no backstopping of the insolvent banks and bankrupt governments and a TILT message will appear in the sky. That TILT message is likely to appear anyway because, remember, the authorities are only pretending that they can manage events. In fact, all of their “management” strategies and shenanigans only insure the further distortion of the basic operating system, which is already so far out of whack from twenty years of previous management efforts that nothing in banking and markets really works anymore.

Companies don’t make money, despite rising share prices. No one in his right mind buys bonds with negative yields — that promise to pay back less over time — so governments have to pretend to buy them. (In fact, they don’t so much “buy” them as simply extinguish them by playing three-card-monte with national treasuries.) And, of course, the masses of people in all these nations — including the patsy USA — sink ever deeper into penury every month.

The release of tension is being felt in the ground game of politics where outsider candidates here and abroad are rising on a tide of rage and resentment. The fecklessness and stupidity of the elites has been epic, sacrificing everything to maintain the illusion of normality. Nothing is normal and “the people” are finally onto it. Sadly, it looks as if both politics and finance are veering toward crack-up simultaneously. The daisy-chained Too-Big-To-Fail banks are already choking on the suicide bolus of derivatives. The equity markets are one algo accident away from cratering. The bond markets are a sick joke. And Hillary may win the booby prize of presiding over the smoldering wreckage of it all. When it happens, she will have no idea what to do.

Thursday, August 04, 2016

I worry, in my area, about the Angry Man Boys. AMBs to save me some typing. They are visually recognizable from across the parking lot of the big box store or the mall entrance for the 24plex. They generally have close cropped hair or shaven heads, but a jutting beard. They tend to stick to leg tats, because many of them work tech or support or somewhere that neck tats create issues; many have sleeve ink that’s “in process.”

The AMBs wear loose t-shirts, usually with some kind of tribal or techy theme, and long floppy shorts, and shoes that are velcro strapped usually — because the AMBs are almost without exception very, very large. Not strong, though I’d be nervous about having to get into any kind of physical conflict with them, but wide and getting wider the further down you go from the shoulders.

They have the angriest car stickers. Pee boy is passé, theirs are everything from “Molon Labe” (in Greek) to stick figures having intercourse, but Trump bumper wear is becoming common. These are not the vehicles with the NRA Life Member decals, but they do have Texian flags with M-16 outlines in place of the Gonzales cannon; they sport the Gadsden flag in bright yellow and a spitting rattler; they are now showing “This is MY family” stickers with different size and type guns lined up in family groups like the stick figure and Mickey/Minnie or zombie motifs you more often see.

The AMBs usually don’t have family, they don’t tend to have girlfriends, and when they do they are large and equally discontented looking. But usually it’s a solo or pair of AMBs you see, peering about with a distinct air of unhappiness, their natural squint reinforced and emphasized by a variety of triggers in their environment. [...]

Tuesday, August 02, 2016

E.g., "India’s government is considering launching talks to merge 13 state-held oil companies into one giant conglomerate that could rival some of the industry’s global giants. Such a new giant would be able to compete with the likes of Rosneft and BP in terms of size."

"[A] monolingual Filipino dictionary [...] maintained by the University of the Philippines Center for Filipino Language (Sentro ng Wikang Filipino; UP-SWF) [...]. The first edition of the UPDF was released in 2001, while the second edition was released on July 29, 2010, coinciding with the centennial of the University of the Philippines. [...] In planning since 1996,[1] the UPDF has been likened to a Filipino version of the Oxford English Dictionary.[2]"

Hot air balloons may be crashing in Texas, but in Philadelphia last week sainted Hillary, draped in spotless white privilege robes, floated through the glassiest ceiling of all on mighty gusts of saccharine gas. The good wife… the good mother… tireless fighter for the rainbow outcasts and gender martyrs of this patriarch-plagued republic, she pledged both continuity and change to the credulous faithful as history yanked her above the gurgling cesspits of allegation, suspicion, and distrust that lo, these many months, had come to be her natural haunt.

The cameras cut to poor brooding Bernie seated just above the delirious groundlings, frowny-faced, arms crossed, brow beetled beneath his white Corinthian curls, perhaps suffering the effects of cheese-steak poisoning. He’d endorsed Saint Hillary with all the passion of a Seventh Avenue soft goods jobber hawking last-year’s resort-wear, and the next day he would up-and-quit the Democratic Party — as if that was not sending a message to the true believers.

Yet another email maelstrom almost spoiled the gala, this one revealing the strings and levers pulled by the DNC chair Debbie Wasserman Schultz in violation of the Party fairness charter. She was axed in a New York minute, and the whole country — including the ADD-afflicted news media — dropped the story to behold the awesome ascension of She-Whose-Turn-It-Is. All except the arch-boor Trump who cracked that maybe Russia could find those 20,000 emails missing from I’m-With-Her’s fabled server. The entire nation, including the aforementioned Special Needs news media, actually missed the point of the gag — which was: how lame are the US security agencies if they couldn’t find those emails but Russia could? And how come nobody raised that question?

Julian Assange then appeared, Jacob Marley-like, to warn the minions of Hillary that he had portfolios full of interesting material yet to dump, and would take his sweet time choosing the opportune moment to do it. How Hillary must wish she could send a Navy SEAL team into Ecuador’s London embassy to ventilate that hacker-rat! It will be fun waiting for Julian to make his move, and to see how much Xanax Hillary will require in the meantime. The DNC coronation show will prove to be only temporary relief from the phantoms and revenants of misdeeds past.

The distraction du jour is whether Trump has become an agent of Russia. Notice that this line of intel comes direct from the neo-con central agitprop desk. This unofficial US War Party representing the amalgamated war industries has been busy demonizing Russia throughout the current presidential term. Not all Americans are so easily gulled, though. Those who know history understand, for instance, that the Crimea has been a province of Russia almost continually for hundreds of years — except the brief interval when the ur-Ukrainian Soviet leader, Nikita Khrushchev one drunken evening gave it away to the then-Soviet region of Ukraine in a fit of sentimentality, assuming it would remain a virtual property of Greater Russia forever. [More about the 1954 transfer of Crimea here.--P.Z.] Notice, too, that since Russia annexed it in 2014 (being the site of its only warm water port and major naval stations) not even the US neo-con war party has been able to make a credible case for fighting over it. Instead, they’ve resorted to name-calling: Putin the “thug,” Putin the “worst political gangster in the world.” This is exactly the brand of foreign policy that Hillary will bring to the Oval Office.

Not that Donald Trump offers a coherent alternative. The reasonable suspicion persists that he doesn’t know his ass from a hole in the ground vis-à-vis how the affairs of the world actually work. For him it’s all same as tough-talking the sheet-rocker’s union. Then, of course, Trump had to immediately step in dog-shit by bad-mouthing the mother of an American army hero who-just-happened-to-be of the Mohammedan persuasion. Trump for practical purposes is a child and a reasonable case is not hard to make for denying him presidential power.

And so the great disaster movie of 2016 commences: Godzilla Versus Rodan the Flying Reptile. Which one will survive to completely destroy the sclerotic remains of our nation? The good news is that voters are moving to the Third and Fourth party nominees, Gary Johnson (Libertarian) and Jill Stein (Green) in droves, herds, flocks, porpoise pods, and stampedes. Perhaps both of these relatively sane candidates will show enough polling strength to make it into the Great Debates. Won’t that be fun?